Regulus Therapeutics has axed 30% of its workforce to conserve cash for its stuttering pipeline. And CEO Paul Grint, M.D., is one of those heading to the exit, having decided to hand in his notice and pass responsibility for turning the business around to COO Jay Hagan.
The cuts will affect all functions. But given 77 of the 97 people Regulus employed at the end of the year worked in R&D, the teams tasked with moving forward the pipeline are likely to bear the brunt of the cuts. Hagan plans to make “increased use of external resources” to offset the loss of R&D capacity caused by the cuts, he told investors on a conference call to discuss the decision and Regulus’ first quarter results.
Once Regulus has paid one-time restructuring costs, it expects the cuts to save it $6 million a year. But those savings will have minimal impact on Regulus’ financial footing. Management expected its cash runway to last until the middle of next year prior to making the cuts. And giving pink slips to approximately 30 staff will do little to push back the day on which it needs to bring in more money.
“The steps we took today only marginally increase that runway,” Hagan said.
Regulus is in a weaker position to raise money than it was this time last year. Back then, Regulus was flying relatively high on the back of phase 2 data suggesting RG-101 could come to market and squeeze dollars out of the contracting hepatitis C market. But that dream was at best deferred by FDA’s decision to place a clinical hold on the program after a second patient experienced jaundice in a phase 1 trial of the anti-miR targeting hepatitis C drug.
La Jolla, California-based Regulus had hoped to get out from under the clinical hold by the end of last year. That deadline came and went and is likely to have vanished from sight by the time Regulus actually gets moving forward again, that is if it does so and decides the hepatitis C market is still worth pursuing.
The travails of RG-101 have shifted attention onto RG-012, a treatment for genetic kidney disease Alport syndrome. Data from a phase 2 trial of the miR-21-inhibiting oligonucleotide are due in the middle of next year, potentially making the results a make-or-break moment for a firm that will then be down to its last dime.
Shares in Regulus fell 26% in after-hours trading.